Cell Phone Insurance

Answer: Is cell phone insurance something you need or would you be losing money on it? It depends.

One out of every three customers will lose or damage their phone within the first year, according to Sprint. In total, this amounts to approximately 60 million cell phones that are lost or damaged every year in the U.S. alone, according to Asurion.

Asurion is the third-party insurance agency for most of the major wireless carriers (including AT&T, Sprint, T-Mobile and Verizon Wireless).

Factors to Consider

While it depends on your unique situation, the short answer is you could often be spending more money on it than you’re saving.

Cell phone insurance can be handy if your handset is stolen, lost or damaged. Many cell phone carriers do offer cell phone insurance for a low monthly fee.

Like with any other insurance policy, though, the name of the cell phone insurance game is whether you’ll spend more money insuring it than you’d save when filing a claim and getting a replacement unit.

The ultimate answer will depend on how soon you’d need a new phone. If you need a replacement device in only 3 months, for example, cell phone insurance will likely have saved you money. If you need it in 3 years, insurance will likely have cost you more money.

As a general rule, it’s unlikely that cell phone insurance would save you money if you have a low-cost, budget cell phone. Cell phone insurance can be more valuable, though, with higher-priced phones (and especially smartphones).

As an example, Sprint offers an equipment replacement program for $4 per month with a $50 to $100 non-refundable deductible (depending on the device) per approved claim.

AT&T charges $4.99 per month with a $50 to $125 non-refundable deductible per approved claim. AT&T allows two claims per year with a maximum replaced value of $1,500 per claim.

T-Mobile charges $5.99 per month with various non-refundable deductibles. Verizon Wireless charges $5.99 per month with a $39 deductible for basic phones or $7.99 per month with an $89 deductible for advanced devices.

Hypothetical Examples

Say you buy a cell phone for $100 and insurance for $5 per month with a $50 deductible. You would only save money on a replacement if your claim is filed by the ninth month. At that point, you would have paid $95 in total ($45 for insurance and $50 for the deductible).

If you buy a phone for $200 and insurance for $5 per month with a $75 deductible, you would save cash if you file before the two-year mark. By then, you will have paid $195 in total ($120 for insurance and $75 for the deductible).

Alternatives to Traditional Cell Phone Insurance
If you’re under contract at your carrier, it might be prudent to avoid insurance and hold out until you’re upgrade eligible. After 12 or 24 months, for example, many carriers offer $100 to $200 off when you restart your contract date and buy a new phone.

If you’re not under contract, this consideration likely won’t be a factor for you. Prepaid wireless carriers typically do not offer discounts for buying a new handset. Without signing a contract, cell phones are usually more expensive.

Because signing a contract often subsidizes the price of your phone, another general rule about insurance is it’ll more likely save you money when you’re not under contract.

Another option is to make your own cell phone insurance program (call it your self-insurance program) instead of paying another company for it.

Just put $5 aside every month, for example, in a high-interest savings or money market account. If your phone goes kaput, you’ve already set aside money for a replacement without having to worry about making a claim or paying a deductible.

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Cell Phone Service Contracts

Signing a service contract with a cell phone carrier is often necessary to get the cellular service and the cell phone that you want. But committing to a two-year contract can be intimidating, even if you're not a commitment-phobe.

Don't take the commitment lightly. After all, you are agreeing to pay what can be a large sum of money to this company every month for the next 24 -- or more -- months. Over time, you may spend hundreds or thousands of dollars on cell phone service.

And, once you've signed on the dotted line, it may be too late to go back. So before you take that step, do your research. Here's what you need to know before you sign up for cellular service.

Before you sign up, find out how you can get out of the contract, should you need to. Most companies will fine you if you decide to terminate the contract early -- and those fines can be as high as several hundred dollars. Find out exactly how much you'll owe if you need to bail, and find out if the fine goes down over time. You may be fined $360 for cancelling within the first year, for example, but that fee may get lower each month after that.

Some cellular carriers offer a limited trial period during which you cancel your contract without paying the penalty fee. Find out if you carrier offers this trial, which is likely to be no longer than 30 days -- if that.

If you do get a trial period, use the time wisely. Use your phone in as many different locations as you can, such as in your home, on your usual commuter routes, and at any places you frequent, so you'll know if your service works where you need to use it. If it doesn't, you may need to switch carriers -- something that can be very difficult to do later on.

You sign up for service that costs $39.99 a month, but when your bill arrives, the total you owe is closer to $50 than $40. Why is that? One reason is the taxes and fees that can't be avoided. Before you sign your contract, ask your carrier for an estimate of your actual bill, with taxes and fees included, so you'll have a better idea of how much you'll really be paying each month.

Not all of the "fees" on your cell phone bill are mandatory, and you should be on the lookout for any services that you didn't authorize. You may find yourself charged for cell phone insurance or a music service you don't need. And if you don't need them, you certainly don't want to pay for them. Ask up front about any of these additional services, and authorize only the ones you want to use.

One of the best ways to save money on a cellular plan is to only pay for as many minutes as you need. If you're not a frequent caller, you may not need to opt for the unlimited calling plan. But you should make sure you're paying for at least as many minutes as you plan to use each month, because going over your allotment can cost you a whole lot. You'll be charged a per-minute rate, which can be sky high, for each additional minute you use. Find out what that rate is, and do your best to avoid paying it. Bumping your plan up to the next level might be more beneficial.

If you use your phone for messaging or surfing the Web, you also should purchase an adequate messaging and data plan. If you're a frequent texter, for example, you'll want to make sure your messaging plan has you covered -- otherwise you could be charged on a per-message basis, which can quickly add up. And remember that you can be charged for incoming texts, sent from well-meaning friends and colleagues, if you don't have a texting plan. So make sure you're covered.

You also should make sure that the data plan you select meets your needs; if you go over your data allotment, you can end up paying a pretty penny for every megabyte of data you upload or download.

If you don't opt for an unlimited calling plan, your carrier may offer you unlimited calls at certain times of the day or week. Some offer free nighttime calling, for example, while others offer free weekends. Before you start dialing your friends, though, make sure you know when those nights and weekends start. Some carriers consider anything after 7pm nighttime, while others don't turn the meters off until 9pm.

Roaming charges, which are incurred when you venture outside of your carrier's regular service area, are becoming less likely today, as more and more people opt for national calling plans. But if you opt for a cheaper regional calling plan, you could get hit with a hefty roaming charge if you travel with your phone. Find out what constitutes your calling area, and what you'll be charged if you venture outside of it.

Traveling internationally with your phone can be an expensive proposition -- but that's only if you're phone will work overseas. Not all carriers offer service that is compatible with the technologies used in other countries. And even if they do, you're likely to find that any calls you make or receive overseas are very, very pricey. If you're a frequent flier, ask about your international calling options.

While you may be satisfied with your shiny new cell phone right now, remember that you're not always going to feel that way. It may lose its appeal before your service contract is up, or it may get lost or broken. Find out what options you have for upgrading or replacing your phone, and what kind of fees you'll be charged in those situations.

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Cancel Cell Phone Contract

While many consumers continue to feel depressed from today’s economic recession, a new question is being increasingly begged and hotly debated: What happens if you’re under contract with your cell phone carrier and you lose your job or otherwise experience financial hardship?

How can you affordably break or cancel your cell phone contract?

While your first thought likely would go to averting homelessness and making rent or being able to pay your mortgage, the increases in bankruptcy, foreclosure, unemployment and credit card debt are all contributing to a burgeoning trend from the cell phone industry to help you if you receive the dreaded pink slip of job death.

Virgin Mobile recently blazed the way by launching on April 15, 2009 a “Pink Slip Protection” plan. The recession-friendly program will waive up to three months of monthly charges if a Virgin Mobile customer becomes unemployed.

While the recently unemployed would likely welcome three months of not having to pay a cell phone bill, many people still spend more than three months to find gainful employment again.

Though you can typically downgrade your plan rather effortlessly and lower your monthly bill, contracts often lock you in and prevent you from quickly jumping ship due to a $150 or $200 early termination penalty imposed by most carriers.

No-contract and prepaid cell phone plans continue to proliferate for this very reason.

Following Virgin Mobile’s lead, consumer interest groups on April 21, 2009 requested for the major cell phone carriers to waive the fiercely debated and often intensely loathed early termination fees for consumers who have lost their jobs.

The Maryland Consumer Rights Coalition and the National Consumers League have both sent letters to Sprint, Verizon Wireless and AT&T on behalf of consumers against the standard U.S. policy of early termination fees.

The reason cell phone carriers say they impose early termination fees is to help recoup their costs for subsidizing cell phones so you can buy them at a lower cost. While most carriers haven’t yet been willing to nix early termination fees entirely, major carriers have recently granted consumers the right to have such a fee prorated so penalties are only levied based on your remaining contract time.

As further validation that consumers are feeling the cell phone pinch and are prepared to react accordingly, a new study by the New Millennium Research Council says 39 percent of Americans will “likely” downgrade their services if they feel the recession will continue over the next six months.

Tip: Sell, Transfer Your Cell Phone Contract

With more than 60 million Americans now having the idea of killing their contracts at the ready, according to the New Millennium Research Council study, that presents a service need for consumers as well as a opportunity for new kinds of businesses.

Instead of paying your carrier such a stiff fine to leave, here’s a concept many people haven’t considered: trading or selling your contract to someone else. Various Web sites have popped up to help you do so for much less than it’d cost you to terminate early.

Celltrade at CellTradeUSA.com is cashing in on people in their time of cellular need with a service that charges you $19.99 to transfer a contract (to “get out”) and nothing at all to take over someone else’s contract (to “get in”). The company supports Sprint, AT&T, Verizon Wireless, T-Mobile, Alltel, Cricket Wireless, U.S. Cellular and others.

CellSwapper at CellSwapper.com is a competitor to Celltrade that charges a little less: $14.99 to transfer a contract and nothing to take over someone else’s contract.

Tip: Ask Your Carrier About a ‘Hardship Policy’

If you can’t get out of your contract or don’t want to try to sell or transfer it, simply call your cell phone carrier and ask them a series of questions to help you lower your wireless bill. You might be surprised how effective one call can be. Here’s what to say.

If you’ve recently been laid off or you’re in some other sort of dire financial situation, you’d also be prudent to ask your cell phone carrier about its “financial hardship policy”. Your cell phone carrier could lower your bill outright, help you downgrade some of your services or grant you a more lenient payment plan.

If you find yourself laid off or in financial hardship, the most important step you can take to make sure your cell phone bill remains in check is to proactively contact your carrier, explain your hardship and lobby for an easement.
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Cell Phone Radiation

The T-Mobile myTouch 3G with Google’s Android operating system, which competes fiercely against the iPhone 3G S for AT&T and Palm Pre for Sprint, has the second-highest cell phone radiation level of any handset in a new, easy-to-digest consumer guide of 1,000 cell phones and smartphones.

That begs the bigger question on the phone you’re using now or about to purchase: Are cell phones safe or do they cause cancer? It’s one of the oldest questions in the cell phone book for which we still don’t have a conclusive answer.

The good news is that researchers continue to churn out studies and burn through funding (and ask for more money) to get definitive answers.

But just like food must be labeled with nutritional facts, the same argument can be made that cell phones should list their radiation output.

In the meantime, we at least have a standard by which cell phone radiation is measured and sometimes reported. It’s called SAR, which stands for specific absorption rate.

In North America, a cell phone’s SAR rating is measured between 0.0 and 1.60 with 1.60 set by the Federal Communications Commission (FCC) as the maximum level of radiation permissible.

Using the SAR measurement standard, we now also have a non-profit organization called the Environmental Working Group (EWG) that has published an important online consumer guide reporting in excess of 1,000 cell phones, PDAs and smartphones on how much radiation they emit. The EWG, by the way, is the same group that publishes the helpful Skin Deep cosmetic safety database.

“We would like to be able to say that cell phones are safe,” said EWG senior scientist and lead study author Olga Naidenko, Ph.D. “But we can’t. The most recent science – while not conclusive – raises serious issues about the cancer risk of cell phone use that must be addressed through further research. [But we] can take steps to reduce exposure [now].”

With 4 billion people on the planet talking on cell phones or 60 percent of the world’s population (according to the EWG), 270.3 million wireless subscribers in the U.S. or 87 percent of Americans as of Dec. 2008 (according to the CTIA) and recent studies finding “significantly higher risks for brain and salivary gland tumors among people using cell phones for 10 years or longer,” the question of your exposure is critical and prescient.

How Does Your Cell Phone Rate?

Talking on your cell phone isn’t like having an X-ray. To quantify your radiation level, though, you can now look your cell phone up at the EWG’s radiation guide so you know if you’re chatting away on one with a high SAR (not preferable) or low SAR (preferable).

While some cell phone carriers list this SAR information (i.e. Verizon Wireless does this relatively well), there’s currently no standard across the industry because there hasn’t been governmental action to require it. Some carriers divulge the information and others don’t. But the EWG has amassed 1,000 cell phones and their SAR levels in one place.

The T-Mobile myTouch 3G, for example, has a maximum radiation level of 1.55 W/kg when held to the ear, the EWG says according to the phone’s manufacturer. This SAR level is just slightly under the FCC-mandated legal maximum and could be of concern to consumers.

By contrast, the lowest SAR rating for a cell phone in the EWG’s guide is the Samsung Impression (SGH-a877) for AT&T, which has a maximum SAR level of 0.35 W/kg when held to the ear, the EWG says according to the phone’s manufacturer. The EWG says the iPhone 3G S rates at a somewhat high 1.19 W/kg and the Palm Pre rates at a lower 0.92 W/kg.

The EWG’s online cell phone radiation guide went live on Sept. 9, 2009 with this mission:

“At EWG, our team of scientists, engineers, policy experts, lawyers and computer programmers pore over government data, legal documents, scientific studies and our own laboratory tests to expose threats to your health and the environment and to find solutions. Our research brings to light unsettling facts that you have a right to know.”

While we wait for definitive answers to surface about cell phone safety and radiation, the purpose of the EWG guide is to help consumers pick out cell phones with low SAR levels.

The EWG’s top 10 best cell phones and smartphones (with low radiation) can be found below along with the top 10 worst (with high radiation). These handsets are listed from best to worst in the best listing and start with the worst in the worst listing.

Lowest Radiation: Top 10 Best Cell Phones
Samsung Impression (SGH-a877) [AT&T]Motorola RAZR V8 [CellularONE]Samsung SGH-t229 [T-Mobile]Samsung Rugby (SGH-a837) [AT&T]Samsung Propel Pro (SGH-i627) [AT&T]Samsung Gravity (SGH-t459) [CellularONE, T-Mobile]T-Mobile Sidekick [T-Mobile]LG Xenon (GR500) [AT&T]Motorola Karma QA1 [AT&T]Sanyo Katana II [Kajeet]Highest Radiation: Top 10 Worst Cell Phones
Motorola MOTO VU204 [Verizon Wireless]T-Mobile myTouch 3G [T-Mobile]Kyocera Jax S1300 [Virgin Mobile]BlackBerry Curve 8330 [Sprint, U.S. Cellular, Verizon Wireless, MetroPCS]Motorola W385 [U.S. Cellular, Verizon Wireless]T-Mobile Shadow [T-Mobile]Motorola C290 [Sprint, Kajeet]Motorola i335 [Sprint]Motorola MOTO VE240 [Cricket, MetroPCS]BlackBerry Bold 9000 [AT&T]In addition to knowing your current or new cell phone’s SAR rating, the EWG also recommends eight safety tips to help you easily and immediately lower your cell phone radiation exposure. Here are five more tips as well from Barton Publishing.

The EWG’s guide allows you to search for your specific make and model – so long as it’s in their database – and you can also find cell phones by cell phone carrier and cell phone manufacturer. You can access the EWG’s full cell phone radiation guide here.

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